>> welcome to lunch money. get the menu today. in tech, tim cook goes to china. he says great things are coming for china mobile companies. life after sports. chuck e. cheeze gets a new life, but will parents ever like him? the nba going to london, and it is getting a new commissioner. it is kick it off with the story

everyone is talking about, president obama coming out with a long-awaited response to the country plus intelligence gathering. these are his first comments since a white house advisory panel recommended the nsa should still collect data, but do a better job of protecting civil liberties. >> we have to make important decisions about how to protect ourselves and sustain our leadership in the world while upholding the privacy protections that our ideals and our constitution require. we need to do so not only because it is right, but because the challenges posed by threats like terrorism and proliferation and cyber attacks are not going away anytime soon. they are going to continue to be a major problem. >> president obama did acknowledge that changes need to be made. hold officeus who in america have a responsibility to our constitution.

thee i was confident in integrity of those who lead our intelligence community, it was clear to me in observing intelligence operations that changes in our technological capabilities were raising new questions about the privacy safeguards currently in place. >> and those changes? datag the storage of bulk from phone calls. he is leaving other action up to congress, a divided congress. >> to ensure that the court hears a broader range of privacy i am also calling on congress to authorize the establishment of a panel of advocates from outside government to provide an independent voice with theificant cases before intelligence surveillance court. >> it is time to read between the lines. a former homeland security adviser with mark crumpton and scarlet fu, richard falkenrath. >> he kicked the can down the road.

he says the book telephone metadata, subject to court order, was going to be transitioned out of the nsa and go someplace else. but he does not say where the someplace else is. he knocked down two of the obvious candidates, one being the telephone companies themselves, who do not want to keep it for longer than they have to come up second is some third-party, which itself is either governmental or nongovernmental. going toea is, you are preserve some of those existing capabilities. but is this tinkering on the margin? >> this is really tinkering on the margins. he wants to preserve the telephone in the metadata program. he is convinced of the utility of that. he cites the key case, one of the 9/11 hijackers who theoretically could have been identified before the attack. he is in the camp that says we need

that capability in the u.s. government, and wants to modify slightly how that is achieved, but he is not specific about how. frank lee, i think it is likely that when the deadline comes for reauthorization at the end of march, they will not resolve this. they will simply reauthorize it and it will roll into the next administration. that issue is complex. >> just in time for the president's big speech, "the guardian" cited new material from edward snowden that said the nsa has collected almost 200 million text messages a day worldwide. the nsa reportedly used it to extract information on financial contracts, border crossings, and financial data. nguyen's a smart phone users in china will have a new way to text. apple ceo tim cook went there to meet them. and new google contact lenses could help measure glucose.

google is working with the fda. ♪

>> this is "lunch money" on bloomberg television, streaming live on bloomberg.com, your tablet, and your smart phone. looking at apple's move to boost sales in china. the country's biggest mobile carrier begins selling access to millions of customers today. it took six years for apple to get the go-ahead from chinese authorities. was it worth it? scarlet fu considers the downside. >> the pricing is not that great and china, if you get an unsubsidized phone, it could be $800. a locally made phone will be in the neighborhood of $300. >> here's the apple juggernaut coming out of 2009, everything is great. i am on the street corner by the iphone store. buy, buy, buy.

i was wrong. here is where howard would comment say shut up and buy it. >> former apple ceo john sculley he does not think pricing will be a problem. >> even at their premium pricing, they are going to sell and a lot of iphones. just in the first day since they announced it over one million orders have come in, china mobile is offering a free iphone with their highest data rate plan. >> former apple ceo thinks the current ceo, tim cook, is putting the company in a great place. >> apple sells high-quality products. they are in a great position, tim cook has done a terrific job positioning them to make money not just on hardware, but it is starting to commoditize, to make money on the services. app store, itunes. even in china, is a terrific amount of usage of their services on the iphone, even though the market share of the iphone is relatively small. >> apple's stock is bouncing back, sculley has lots of company, like gamco's ceo.

he is more bullish than ever. >> international expansion is a big part of the story. chinastion about that in as the centerpiece. greater china, taiwan, hong kong is significant. it is only going to grow. the key thing here is that apple's marketshare has not receded. apple's market share has solidified and is poised to grow from here -- domestically and overseas. >> my business week article of the year was sam grobart on three apple executives, they said they would not give up the high ground of an aspirational product. do you think india and china will pay up for an aspirational product? >> absolutely, the apple brand in china is still extremely strong and very much an aspirational product. this is a company that had near riots at their beijing and shanghai stores a couple years ago when new phones were introduced. >> a couple years ago, that is key.

>> scarlet, the apple brand is going to be very strong in china. there are subsidized phones available for heavy data users on china mobile. they will give you the phone for free. >> targeting a certain kind of customer, when investors look at apple, do they see a growth stock or value stock? every time you hear someone bullish on apple, they point out how cheap it is. >> it is priced like intel, no growth. >> a value stock. >> it is a value stack -- stock. 8.1% free cash flow yield, 2% dividend yield, ongoing execution of a $60 billion share buyback. it is priced -- they will earn about $45 a share, priced for no growth. we think you are going to have double-digit growth this year, close to double-digit next year. the growth story is not dead. >> hold the phone. not everyone is into apple.

it was recently downgraded on moral grounds. >> they are sitting on a $150 billion in cash, their employees and asia are making less than three dollars an hour, many have already committed suicide. in this country, you that christmas bonuses, performance bonuses, profit sharing, health care coverage. apple would never be able to get away in this country treating employees the way they do in asia, management would be thrown in jail. they would not be tolerated, they cannot abuse workers in this country so they are going where they can get away with it. >> moral grounds aside, one company is using apple products to its advantage, a robotics company, toys driven by artificial intelligence. sam grobart looks at how it works. >> most of the time, when we talk about robots and artificial

intelligence, we tend to think about robots in the workplace or "terminator." we are not usually talking about toy cars. that is exactly what a new toy is all about. developed by engineers out of carnegie mellon, it looks like one of those old radio controlled car sets you might play with while waiting for "the cosby show." but it is way more advanced. your smart phone can work as a steering wheel, cool. more interesting, the same smartphone controls all the other cars on the track. they know where they are and where you are and are adapting in real-time. each race is different. we have seen artificial intelligence and video games. this takes a look that and brings it into the physical world. not only can you outrun your opponents, you can fire imaginary weapons at them, hold down a button on your smart phone and watch the car in front of you come to a halt after you zap it with a virtual cannon.

this is not cheap, a starter kit runs you about $200. you can get a track and two cars. more cars are $70 a pop. it only works on ios devices right now, they say an android app is in the works. game time is not everlasting. cars will use up their battery after 20 minutes of play. robotics, the future is here! the future is now. the future is kind of expensive. >> the former ceo of home depot and chrysler, bob nardelli shares lessons learned over the years. former new york giant tiki barber will tell us about his new business venture. that is next in career. and check this out. in spain, ancient tradition involving courses and fire. horsemen ride through bonfires on village streets, the ritual

goes back hundreds of years. it is supposed to cleanse the horses of disease and bring good luck. hope it does not turn them into stake. --steak. ♪

>> in career, what makes great leaders? betty liu has a new book, "work smarts." what ceo's say you need to know to get ahead. she has asked some of the biggest leaders in business what got them to the top. all week, we have been hearing from them. today, bob nardelli, ceo of chrysler and prior to that he ran home depot. currently, he is a senior advisor at cerberus capital management. he shares his thoughts on lessons from his career.

>> you have to learn different customs, some countries work on sundays. while that may not be the practice in the u.s., if you are serving that country, you have to be available. once you take on the responsibility as a ceo, the priority is doing the job. most ceos would say they regret not making that decision sooner. i am not talking about a knee- jerk or cavalier reaction, by getting the facts and getting as informed as you can from as many constituents as possible. then making decisions. at chrysler, i would be told that is a big risk. my response was not taking risk is a bigger risk given situation. we have to listen, learn before we can leave. -- can lead.

i only wish i had the wisdom and the experience that i have now 20 years ago. i think i would have been much more effective. i could have contributed more to the success of the business. i could have been a better partner with my staff. >> well, careers evolve over time. especially when you start as a pro football player. betty liu spoke with former new york giants running back tiki barber, he has got his own business. this is called thuzio, think of it as rent a pro, hang out with a pro athlete, use a little star power to close the deal. betty asked him how it started. >> a couple years ago over cigars, we found a need from a talent perspective and the customer perspective. to book talent you had to go through an agent. we created a marketplace where e-commerce could take place. it has been fantastic, a lot of clients doing events that before thuzio was around and not exist,

pickup basketball games with stars. >> it was ad hoc. >> we found a way to systematize it. because of big events, like the super bowl, as you mentioned. all these companies do events. >> people were trying to find you? >> if they had to find me, you had to know me personally or know my agent. it was not efficient. thuzio provides a marketplace where you can shop and see pricing. >> it must be really busy, tell me about what business is like before super bowl weekend. >> it is very busy. literally over 1000 talents are ready to engage with business customers, with consumers to make their super bowl experience is even more special. they are doing everything from showing up at parties to playing flag football before hand, doing video greetings.

an inviting people to the events. >> who are the most popular athletes? >> joe montana is doing an event, bill sims, dan marino. the goto guys who are all converging on new york city, we have been able to book and to fill our clients' requests. >> how do you share profit? >> 20%. that is standard across the industry. clearly, what we have done is created more opportunities for our talent. more importantly, we have created access for companies and individuals who want to spice up whatever event they are trying to do. >> is a you personally, are you asking friends to participate? >> we develop expertise in finding talent. you would think they are easy to get to. >> you must know everyone. >> but it is not that easy, it

took as a long time, we have over 1500 talent on our site across the country. we do stuff in new york and also in california or texas. it does not matter where you are, it is a matter of having access. >> are football players in the most demand? >> right now, of course, people want to watch football and know what they are watching. if you have an opportunity to do a game watch with a player sit next to you and tell you what is going on, share a beverage or whatever. >> what are you booked for? >> a few things, we have an accounting firm we are doing a lot of business with. doing a couple of dinners. i have an agreement with another organization, going to a game watch. there are a bunch of things. >> super bowl weekend? >> during the week, it is seven days in new york city. it is not just game day or the game before.

it is all week. we have a bunch of things lined up, including on radio row. i have a radio show as well, we converge on one location, this here it is at the sheraton on 58th street. radio from all across the country will be there talking about again. -- about this game. the celebrities will walk in between and pitch products. we have been able to source some of those products with our talents in the cap extra access. -- so that they can have extra access. >> since we had tiki, we had to get his picks. >> the four best teams. obviously, it is billed as manning versus brady. >>who do you think will win? >> the patriots and seattle. it has changed a little bit. >> remember, all this weekend and next, more from the interviews with global leaders on how to get ahead. a few weeks left until nba commissioner david stern is stacking down.

-- stepping down. what is next? the transition, coming up next. chuck e cheese gets a little boost. what will it do for mom and dad, how will they keep those guys happy? ♪

>> this is lunch money on bloomberg television. we are streaming live on your tablet and smartphone and bloomberg.com. moving pictures, where the video is the story. antigovernment protesters in bangkok -- a grenade was thrown. dozens of protesters were injured. protesters want the prime minister to quit and they're calling for the february 2 elections to be postponed. more than 80 brush fires are burning across southern australia. fanned by high winds and the blistering heat wave. one fire covers 81 square miles and so intense it's trigger

lightning -- it triggered lightning, creating its own weather. the professor on gilligan's island -- russell johnson -- he joked that his character was smart enough to make a radio out of a coconut but could not fix a hole in a boat. found new generations of fans banks to reruns. chuck e cheese gets another chance. the kid restaurant known for quirky keeps the does not come close to new york style, in a wild arcade atmosphere. it got a boost in the middle of the climbing sales. apollo will buy the chain for $1.3 billion. you can see the spike on the far right side of the chart. the founder launched atari and said it will be good for the brand. >> chuck-e is still a very powerful brand. almost no child has not had a birthday party there in the last 30 years.

apollo is a good company. it is in good hands. they will do interesting things with it. >> like what? >> i think that there is a lot of opportunity with the brand. i think that apollo is -- there are a bunch of smart guys. and i think there will be a lot of very interesting things. >> what is the opportunity? what is the lost opportunity? what have they messed? what could they have done that they did not? >> i hate to climb into the details. >> do it! >> [laughter] i think that kids like chuck e. cheese a lot, but their parents do not.

>> what? parents don't like it? no way! >> unfortunately i had a headache for three days afterward. >> i have never darkened the door. what will i say? >> that is what you will see. semi-animated, big things. really bad pizza. >> i can't remember what we had when the kids were urchins. i used to pray that birthday parties would not be there. >> i have watched from the outside and that is enough. better idea. i cannot say that. i have been in -- deep. >> that explains one of the recent tv spots. >> when i opened the first chuck e. cheese's, i did not just do it for the kids, i did it for you.

the moms and dads. i wanted a place where you can bring your kids and then relax, feel safe, and let go. watch them have fun. they're going to grow up, just not today. not if i can help it. >> one thing that might work, try turning back the clock just a little bit. >> when i was running it, we always had it so that you could drink beer. >> alcohol. >> that helps. >> they don't do that anymore. i would bring a little bit of that back. >> a little bit of old-fashioned entertainment. people may not realize you are the guy who created atari, among other things. do you need to update the whole gaming side of the place as well? >> i think so. i think the gaming for kids is -- kids today, with their

tablets and smartphones, they're more sophisticated in their game knowledge than ever before. >> they are more sophisticated in their game knowledge. it makes it more challenging for some of these product makers. >> you just have to match the competition. your competition is not the pizza parlor down the street. it is the tablets that they have in their home and the amount of game consumption on the rt of everybody right now is tremendous. >> that is a good point. chuck is going to need some help. sales of declined seven of the last nine quarters. we will show you one of the most expensive tables in sin city. one-on-one with the owner of the new jersey nets. ♪

>> this is lunch money on bloomberg television. a streaming live on bloomberg.com, your tablet, your smart phone. wildcard -- we are going with high rollers -- vegas-style. these guys get all the perks. the $250,000 per night table at the bellagio nightclub. in a special one hour documentary called "the player," trish regan takes us behind the scenes. make a gambler don johnson. gambler don johnson. >> inside mgm's bellagio casino at the exclusive hyde nightclub is one of the most expensive

tables. i like this table. >> absolutely gorgeous. >> part of its value is the view. 1200 water spraying robots, glass. $40 million. inside the club, the fountains are made of champagne. hyde is the most profitable club in vegas per square foot. the average table costs $8,000 per night. this one, $250,000. what makes it different? this red button. the cost to set off these fountains -- $10,000. the number of people who reserved the table in 2013 -- two.

>> i want to keep hitting the button. >> that is out of control. where casinos eager to get their hands on the high rollers? trish explained. >> if you are spending a couple million box at the casino, they want to give you everything they can, they want to keep you there. i want to push that button. >> is this competing with macau? >> macau has done incredibly well and has significantly surpassed vegas. the why as to the documentary is that it looks at the challenges that we faced year for the gaming industry over the course of the last several years. it is through the eyes of that particular player whom you saw. he managed to win $15 million playing blackjack within the span of a few months. he did this in part because the casinos were vulnerable and they negotiated very good odds. >> i want to know how to do that. the operators of that hyde nightclub are opening their own casino next fall.

it will be called the sls. the perks will be even more outrageous. they will do private performances in intimate venues. it does not get any more vip than that. to see more about the life of a vegas whale, you have to watch trish's special report, "the player." that is next tuesday, january 21. i will be watching. the nba is going global. we will take you to london. nba commissioner david stern tells us about the plan once he steps down. ♪

>> this is lunch money on bloomberg television. a streaming live on bloomberg.com, your tablet, your

smart phone. a global nba -- last night it went to london. a sold-out crowd. whether going global has worked. >> the brooklyn nets are on the road. this is no ordinary away game. the nets are facing off against the hawks. it is a home game for atlanta -- only it is in london. it is the national basketball association's eighth ever regular season game in england. the latest arduous step to take the franchise global. >> we looked at some of the assets we had. brooklyn itself, global brand. now we are at the point where we want to further leverage it and ultimately monetize it. >> the nba is already going global. the nets' owner is russian. some players are from europe. the hawks of the first macedonian.

kevin garnett may be the biggest draw, but his chinese shoes are the business. move over, air jordan. the nets say it is designed for a global audience. the soccer players to not have much to worry about yet. >> can basketball be big? >> it is big in russia, just not as big a soccer. >> it does have one fan so big, it is hard to get a question in. how excited are you about american basketball in london? >> i love it. >> the nets won the game. basketball's battle for the world's hearts is just getting started. bloomberg, london.

>> the nets have an ambassador in its owner mikael prokhorov. he is russian and a former player himself. you can see him schooling our ryan chilcote. they did get to talk about business after the workout. >> you need very good professional staff. you need great players. you need the team spirit. only with money it is impossible to reach the championships. >> when you bought the nets, you were the first international honor when you bought the nets. -- first international owner. fast forward to now. do you think the league has become more global? >> there is interest in many countries. i know a lot of foreign investors keeping an eye to invest in the nba. >> transition time. the current commissioner is retiring after 30 years on the job. the nba's revenue soared more than 4500% up to $5.5 billion

annually under his tenure. adam silver is going to be taking the helm. we spoke with the author of an article about it. >> they did this in a very gradual process. very smooth, they built a consensus over time. while they are not publicly traded and that saves them from dealing with the troubles that comes with that, it does serve as an example. they work with large corporations. their partner is espn. >> they have lots of constituencies. even though david stern's title is commissioner, his job description is like that of a ceo because he is shareholders to answer to, those owners. >> that is what we talked about. when david stern took over, it was more like a commissioner as you think of it. a top cop making sure everybody stayed in mind. but now, the league is a media property.

that means it is a ceo job. you have to be managing, merchandising, marketing. the first thing silver is going to have to do is negotiate new national tv deals that will be worth more than $1 billion per year. >> david stern led quite a legacy with the way he dealt with the players union. there was a five-month lockout. >> stern puts over in charge of that as an opportunity for him to step up and be in front of the owners more. when it became apparent that silver was going to be the next commissioner, the owners asked for more time with them. they wanted to hear him speak in his voice. that is really when he did it. they basically won that negotiation. they extracted a pretty big cut in the share of revenue that goes to the players. that won him the final approval of the owners. they voted 30-0 to make him the next commissioner. >> he was also in attendance

last night in london. he talked about succession. >> you judge corporate leaders not only on the job they do, but also in the succession plan they have done. adam silver will take over on february 1 and he has been with the nba for 22 years. much of our success is attributable to adam. >> people so you will be a difficult act to follow. >> not so. adam and i will be a difficult act to follow. the nba still has adam and they have the complete continuity and knowledge and work ethic and expertise to go to new heights. >> the biggest challenge in front of adam? the unfinished business? >> how to manage an enterprise that continues to grow. every successful corporation has to deal with that because there will be so many markets calling out for so much development, asset allocation.

you have to make sure you get the people and you deploy them correctly. it was the same problem we had when we were 24 people. >> you will be on a boat and turn off the tv and not watch? >> i will always watch. i don't like sailing or yachting or ships that much. he won't be on my speed dial either. i will be enjoying it. i will be available to help in anyway i can because i think that it is fun to watch this thing continue to grow. >> transition game. the cover story of the current bloomberg businessweek. virtual sunrises had to be brought in. huge digital commercial television screens have been set up to observe virtual sunrises and sunsets in beijing to make up for the smog. ♪

>> it is approaching 56 past the hour. a bloomberg television is on the markets. a mixed day.

the dow was the only index in positive territory. on the s&p, the biggest drag in the index was consumer staples. overall, it economic data coming out today is building permits and housing starts came in lower than estimated for december. economists are saying these numbers can be volatile and the housing market is showing signs of stabilizing. ge was down. manufacturing fell short of estimates. ups also said its earnings would disappoint for the fourth quarter. it had to hire more workers than it land. and it still missed some holiday deliveries. best buy was the biggest loser in the s&p, after suffering a huge trout, the biggest in more than a decade yesterday. it saw declines in u.s. holiday sales, down by 1.5%. that was matt miller, saying crushed.

investors are wondering what is happening next, so i bring in the experts, matt miller and olivia sterns. what are you watching next week? >> i am going to keep watching earnings. i have been surprised. obviously, not many companies in the s&p 500 have reported, 6% or 7%, but more than half have missed earnings expectations. analysts are professional lowballers. >> and companies want to lowball themselves. >> ups put numbers out ahead of time. >> you want to under promise and over deliver. usually, 76% of companies in the s&p beat earnings estimates. right now, 48% have beat. it is not looking great. robert albertson was on with tom this morning. he said we are seeing margin compression come to a halt. whatever. nextsoft is coming out

week, among a slew of other really important consumer names -- starbucks, johnson and johnson. the cool thing about microsoft -- we are expecting them to show a drop in aps even though they are going to show a growth on the revenue side. maybe they will say something about their ceo search. >> and you confirmed with alan mulally in detroit that he has no intention -- >> it seems no one wants to take the job at microsoft. >> it is probably a difficult job. it looks like they have their eye on three main contenders. one internal guy, who is their head of cloud concluding -- computing. it will be interesting. >> it will be interesting to see if they wind up saying anything at all. olivia, you are going overseas. >> fortunately, i am not actually going to davos. sleepy swiss a

village, the world economic forum. can be exciting if you are 80. >> shinzo abe will be the keynote speaker. we will hear a lot of talk about currency wars. the president of brazil is also going to be there. we will hear a lot about what europeans and leaders around the world think about the nsa spying. nerds, microsoft, and climate nerds. thank you so much. pimm fox will, sit down with the former director of the nsa and cia. ♪